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TZA Crosses Critical Technical Indicator

In trading on Friday, shares of the Daily Small Cap Bear 3x Shares ETF entered into oversold territory, changing hands as low as $20.08 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100.

In trading on Friday, shares of the Daily Small Cap Bear 3x Shares ETF ( TZA) entered into oversold territory, changing hands as low as $20.08 per share. We define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30.

In the case of Daily Small Cap Bear 3x Shares, the RSI reading has hit 29.7 — by comparison, the RSI reading for the S&P 500 is currently 68.4.

A bullish investor could look at TZA's 29.7 reading as a sign that the recent heavy selling is in the process of exhausting itself, and begin to look for entry point opportunities on the buy side.

Looking at a chart of one year performance (below), TZA's low point in its 52 week range is $20.08 per share, with $76.60 as the 52 week high point — that compares with a last trade of $20.14. Daily Small Cap Bear 3x Shares shares are currently trading down about 2.9% on the day.